DoD News

News Article

Embargo Chief Says Iran in Cahoots With Iraq Oil Smugglers

By Jim GaramoneAmerican Forces Press Service

MANAMA, Bahrain, April 11, 2000  The best efforts of the U.S.-led Maritime Interdiction Force to stop Iraqi oil smuggling in the Persian Gulf will be for naught if Iran continues to allow smugglers to use its territorial waters.

Vice Adm. Charles Moore, coordinator of the international force and commander of the U.S. 5th Fleet, said the rise in oil prices has fueled a boom in oil smuggling. He said intelligence shows 40 to 50 ships ready to take on oil on the Shatt al Arab, a waterway leading to the gulf from Iraq.

Moore spoke April 6 with reporters traveling with Defense Secretary William S. Cohen in the gulf region.

The admiral said smuggling works like this: Ships load Iraqi oil at a Shatt al Arab terminal. Half the river belongs to Iraq, half to Iran. The Maritime Interdiction Force shut down the Khor Abd Allah, another river and possible smuggling route to the gulf.

Once the smugglers reach the sea, they meet Iranian patrol boats mostly manned by members of the Naval Revolutionary Guard Corps. By paying $50 per metric ton of oil, the smugglers receive forged paperwork saying the oil originated in Iran and safe passage through to use Iranian territorial waters.

Iran's waters extend to the Straits of Hormuz, the mouth of the gulf. Moore said electronic intelligence tracks the ships, but the Maritime Interdiction Force cannot enter Iranian territorial waters to enforce the sanctions against Iraq.

He said the smugglers sometimes make a mistake and the U.N. force intercepts them. Moore has taken his evidence to the U.N. Security Council and urged members to persuade Iran to stop abetting the smugglers.

"We are going to have to see the pattern change here," he said.

Oil prices drive the smuggling, Moore said. There was virtually no smuggling when oil was selling at around $10 per barrel. He said smuggling skyrocketed when oil prices climbed to around $30 per barrel.

He estimated smugglers in February transported over 400,000 metric tons of oil -- 2.9 million barrels worth nearly $88 million. If oil prices stay high and Iran continues its policy, smugglers could transport almost 5 million metric tons of oil in 2000, he warned. This would be more than all the oil smuggled from 1996 through 1999.

Iraq charges smugglers $95 per metric ton -- about $13 per barrel. The smugglers pay $50 per metric ton to the Iranians and sell the oil at their destinations for $205 per metric ton.

The smugglers' destinations are Dubai and Fujairah in the United Arab Emirates, Bandar Abbas in Iran and ports in India and Pakistan. Moore hastened to add that the United Arab Emirates is doing what it can, sending its coast guard to intercept smugglers in their coastal waters. The emirate has established a port authority to end the practice, Moore noted.

The Maritime Interdiction Force has diverted 16 ships to date in 2000. It diverted only 16 in all of 1999.

Saddam Hussein could sell oil legally through the Oil for Food program. That U.N.-monitored program allows Iraq to sell oil and receive food, medicine and other necessities in return. U.S. officials have asserted for years that Hussein wants money to rebuild his military and possibly his weapons of mass destruction program.

The Maritime Interdiction Force was created in 1990. The United States, because of its command and control network, coordinates the force. The United States and 17 other nations have supplied ships, boarding teams and planes to the force. The other participants are Argentina, Australia, Belgium, Canada, Denmark, France, Greece, Italy, Kuwait, the Netherlands, New Zealand, Norway, Oman, Saudi Arabia, Spain, the United Arab Emirates and the United Kingdom.

Moore said the force stops only 3 percent to 5 percent of the smugglers. "There's not much more we can do if Iran doesn't cooperate," he said.